Dear Momentum Options Subscriber,
While I was a little uneasy about a pullback today, I’m not too worried at the moment, providing fresh support levels hold and lower lows aren’t set versus those made earlier this month. It is too early to say whether a session bottom is in, but the major indices have shown signs that they are trying to stabilize.
Volatility is spiking, however, as the S&P 500 Volatility Index ($VIX, 15.81, up 2.43) is up 18% and has cleared 14.50-15. I warned that it would be a bearish development if upper resistance holds into the closing bell, but I’m also aware that “stretch” levels can come into play, which is why the bears will need to hold the aforementioned levels for consecutive sessions.
We can cross both bridges of lower lows and an exploding VIX if and when we get there, but perhaps a brighter picture will appear once today’s dust settles.
The Dow is down 185 points to 18,142, while the S&P 500 is falling 24 points to 2,138. The Nasdaq is declining 76 points to 5,252, and the Russell 2000 is sinking 23 points to 1,227.
I have updated our current trades below, and I also have a Trade Alert for our position in Goodyear Tire & Rubber (GT), which we were stopped out of today. Stay locked and loaded into the close in case I take additional action.
Momentum Options Play List
Closed Momentum Options Trades for 2016: 74-26 (74%). All trades are dated and time stamped so new subscribers can look at the past history to see how the trades have played out.
Do not risk more than 5% of your trading account on any one trade but do try to take all of the trades. Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless I list one. I will send out a “Profit Alert” or “New Trade” if I want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the 9 a.m. and 12 p.m. – 1 p.m. updates. Also, I will usually give you a heads-up if I think I’m going to send an email outside of these time frames.
All prices given in this update are current as of 1:50 p.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Goodyear Tire & Rubber (GT, $32.21, down $0.29)
GT October 33 calls (GT161021C00033000, $0.30, down $0.11)
Entry Price: $0.75 (9/22/2016)
Exit Target: $1.50
Stop Target: $0.20 (Stop Limit)
Action: The Stop Limit at $0.20 was triggered during today’s pullback in the stock, and we are now out of the position.
Apple (AAPL, $116.76, up $0.71)
AAPL November 125 calls (AAPL161118C00125000, $1.12, up $0.31)
Entry Price: $1.10 (10/11/2016)
Exit Target: $2.20
Stop Target: None
Action: The Exit Target for the trade is at $2.20, but it is not a Limit Order at this time. There is no Stop Limit at this time.
Resistance is at $118.75-$119. Support is at $116-$115.
Finisar (FNSR, $29.80, down $0.84)
FNSR November 31 calls (FNSR161118C00031000, $1.05, down $0.23)
Entry Price: $1.28 (10/10/2016)
Exit Target: $2.60
Stop Target: $0.60
Action: Support is at $30-$29.50. Resistance is at $31-$31.50.
You can read my detailed write-up on FNSR in the Sept. 22 Mid-Market Update.
Kroger (KR, $29.92, up $0.77)
KR November 27.50 puts (KR161118P00027500, $0.30, down $0.10)
Entry Price: $0.50 (10/4/2016)
Exit Target: $1.00
Stop Target: None
Action: I would like to see shares hold $30 into the close. Fresh resistance is at $29.75-$30. Support is at $29-$28.75.
Halozyme Therapeutics (HALO, $11.64, down $0.53)
HALO November 13 calls (HALO161118C00013000, $0.65, flat)
Entry Price: $1.07 (9/27/2016)
Exit Target: $2.15
Stop Target: $0.40 (Stop Limit)
Action: Fresh support is at $11.50-$11.25. Resistance is at $11.75-$12.
Viavi Solutions (VIAV, $7.36, up $0.06)
VIAV December 8 calls (VIAV161216C00008000, $0.27, up $0.09)
Entry Price: $0.51 (8/19/2016)
Exit Target: $1.05
Stop Target: $0.05 (Stop Limit)
Action: Resistance is at $7.45-$7.50 and the 50-day moving average. Support is at $7.25-$7.15 and the 100-day moving average. Continue to hold.
Editor and Chief Options Strategist